Taxation in Poland
According to the Polish Constitution only the Parliament is empowered to levy taxes and decide on their basic structural elements, including subjects, objects and rates of taxation, principles of granting tax reliefs and remissions, categories of taxpayers exempt from taxation. Thus Polish sources of tax law include first of all acts of Parliament (laws). Regulations issued by the Minister of Finance upon a statutory authorization may only implement tax statutes in accordance with the guidelines included in the authorization. Ratified international agreements (e.g. double taxation treaties) are also sources of universally binding law. International agreements ratified following prior statutory consent (which is typically necessary for tax treaties) have precedence over statutes. European regulations and (under further conditions) directives are applied directly and have precedence over Polish domestic law. Units of local (self)government are not entitled to introduce taxes. They are merely allowed to decide on rates and exemptions in local taxes, within the limits set forth in statutes. Thus, local legal enactments are a source of tax law with limited scope of application and relevance.
At present state taxes levied in Poland (i.e. taxes generating budgetary revenues of the State) include: personal income tax, corporate income tax, tonnage tax, tax on goods and services (Polish value added tax), excise duty, gambling tax. Local taxes and duties (generating budgetary revenues of units of local self-government) are: real estate tax, agricultural tax, forest tax, tax on civil law transactions, inheritance and gift tax, tax on means of transport, duty on possession of dogs, stamp duty, market duty, tourist and health resort duty. However, it is worth remembering, that some local taxes are administered (assessed and collected) by state tax authorities.
Basic notions of tax law (e.g. “tax”, “taxpayer”, “tax withholding agent”, “tax collector”, “tax liability”) are defined by General Tax Law of 29 August 1997 (further referred to as “GTL”). Common issues of tax liabilities (e.g. rise and termination of tax liability, payment of tax, tax arrears, default interests, extension fees, excess payment and its refund) are also prescribed in detail in GTL. Besides, tax proceedings are regulated therein (Division IV).
Most frequently tax liability arises ex lege, i.e. when an event occurs which according to a tax statute gives rise to tax liability. Then self-assessment method (e.g. business income) or withholding (e.g. employment income, interests, dividends) is applied. Taxpayer calculates tax due, reports it together with details of taxable base on a tax return and pays tax. Withholding agent calculates, collects, reports and remits tax due to tax authorities. If tax authority discovers that the amount of tax liability (tax due) is different than reported or paid, it commences tax proceedings to issue a decision specifying the amount of already existing tax liability (tax arrears). Pursuant to GTL, tax liability may also arise by means of an administrative decision (i.e. when tax authority’s decision determining the amount of tax due is served). However, only some tax liabilities arise in this manner (e.g. real estate tax from individual taxpayers).
Malgorzata Sek
Foundation Centre of Tax Documentation and Studies in Lodz
